There is a good addendum to Jim's net_config writeup that better explains why 10.x.x.x and 192.168.x.x networks are often used internally. It's entitled 'RFC 1597 - Address Allocation for Private Internets (RFC1597)' and its webpage is http://www.faqs.org/rfcs/rfc1597.html.

The most interesting section here is the one starting with

The Internet Assigned Numbers Authority (IANA) has reserved the following three blocks of the IP address space for private networks: